Tax Deductible Item

An item or expense that is subtracted from your gross income (e.g., total income), allowing you to reduce what you owe in taxes.

Example

An example of a tax deductible item is the interest you pay on your mortgage. If you earn $50,000 a year and you pay $5,000 in interest on your mortgage, you may only owe taxes on $45,000 of your income (assuming your itemized deduction exceeds your standard deduction).

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